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Question

Autonomous investment is influenced by which of the following?

A
Fiscal policy
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B
Monetary policy
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C
Technological changes
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D
All of the above
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Solution

The correct option is D All of the above

Autonomous investment refers to that investment which is independent of the level of income in the economy. It refers to the type of investment which is not affected by a change in the level of income in the economy. These kind of investment are influenced by the following factors:

1. Fiscal policy: It refers to the government policy like tax revenue and expenditure which affect the investment in the economy.

2. Monetary policy: It refers to the central bank policy like bank rate of interest, cash reserve ratio which affect the amount of investment in the economy.

3. Technological changes: It refers to changes in the technical area of business which affect the requirement of investment in the economy.


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